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MILES O'BRIEN, CNN ANCHOR: Checking our top story this is morning. Searchers have recovered 38 bodies from the Black Sea. This after the crash of an Armenian airliner. Bad weather suspected in the crash. All 113 aboard killed.

The White House out today with a plan in case of a flu pandemic. The 220-page plan paints a gruesome picture. The worst case scenario envisions 2 million people dead, 50 million infected in the U.S.

And in Durham County, North Carolina, District Attorney Mike Nifong narrowly winning the Democratic nomination for another term. He's unopposed in the general election. He overcame accusations he used the Duke lacrosse players' scandal for political gain.

SOLEDAD O'BRIEN: Iraqi police and college students targeted this morning in several violent attacks. Also, a grizzly discovery of 14 bodies in Baghdad. All apparently had been tortured. Let's get right to CNN's Ryan Chilcote. He's live for us in Baghdad this morning.

Ryan, what exactly happened?

RYAN CHILCOTE, CNN CORRESPONDENT: Sure, Soledad.

Well, we start with the discovery, as you say, of the gruesome discovery, the 14 bodies. They were found this morning in northern Baghdad. All of them the bodies of men who had been shot in the head. Some of them showing signs of torture. Some of them still wearing handcuffs. That on top of 20 bodies found in the Iraqi capital today. All of these 34 individuals thought to be the victims of sectarian violence.

Then just west of Baghdad in the city of Fallujah, this morning, a suicide bomber blew himself up in a line of police recruits, killing at least 16. Wounding at least another 25. Fallujah is a primarily Sunni city. The police tell us they think that this attack was part of an insurgent campaign to discourage the Sunnis in that city. Sunnis are thought to be -- making up the bulk of the insurgency from joining the police.

MILES O'BRIEN: There's an outrageous story we've got to tell you about in Ft. Lupton, Colorado. A funeral director, also happens to be the town's mayor, accused of stealing money from a dead Marine. John Ferrugia from our affiliate KMGH with the story.

(BEGIN VIDEOTAPE)

ELIS SEPULVEDA, MOTHER: My son died instantly. And the other Marine died approximately two weeks after.

JOHN FERRUGIA, CNN CORRESPONDENT: Jason Sepulveda, a Marine, was training at Camp Lejune, North Carolina, preparing to go to Iraq when, in an evening off base, he was killed in a car accident.

SEPULVEDA: This is his last picture of him leaving home.

FERRUGIA: His parents, who spoke with him weekly, knew he had been saving his money for a long weekend when they would all be together.

SEPULVEDA: We were going on vacation for the Fourth of July to visit him. And I know he had been sacrificing because they don't get paid very much.

FERRUGIA: Jason's body was returned to Colorado for burial and records show the funeral was paid for in full by the Marines. But after closing out her son's accounts, Jason's mother realized the probate court had sent the proceeds of Jason's savings account to the funeral home run by this man, Jim Bostick.

SEPULVEDA: And I called Mr. Bostick. He just kind of really blew me off a lot.

FERRUGIA: Did he give you any other receipts or bills?

SEPULVEDA: Never.

FERRUGIA: He just kept the money?

SEPULVEDA: He just kept the money.

FERRUGIA: Jim Bostick not only owns two funeral homes, he is also major of Ft. Lupton and heads the city council. In that role, he is heavily involved in overseeing the finances of the town.

SEPULVEDA: You know I told Mr. Bostick, well that's my son's money.

FERRUGIA: Now Elis Sepulveda took Bostick to court over the money he wouldn't return to her family. And the judge's order in the case was final.

SEPULVEDA: She gave damages, interest, court fines, everything. And I assumed that if you go to court, that you're just supposed to -- you know, you pay it.

FERRUGIA: I'm John Ferrugia. I'm from over at Channel 7.

But despite the judgment of more than $7,500, Jim Bostick has refused to pay.

Why are you still holding the money for this Marine family?

BOSTICK: Well, I'm not holding the money for them. You know, and I don't want to be on camera right now.

FERRUGIA: Clearly Bostick was not happy to see us.

These aren't the only people you owe money. You owe people -- other people money. You got other judgments out there. You want to talk to me about that?

BOSTICK: No, I don't.

FERRUGIA: In fact, court records show Bostick has several current, unsatisfied debts to creditors from Greeley to Montana. And that doesn't include money he owed when he took bankruptcy in 2001.

This is a city building.

BOSTICK: I know, sir. I just don't want to be on camera.

FERRUGIA: He claims he's trying to repay the money but he didn't want to talk about the money he owes to the Marine family or whether given his personal financial problems he should be making fiscal decisions for the town of Ft. Lupton.

I want to know if you think it's appropriate for the mayor, who has fiduciary responsibility, to owe this kind of money.

We've obtained letters written by Bostick to the families saying he would resolve the issue but . . .

SEPULVEDA: It got to the point where he would just not even accept our phone calls and just say, I can't hear you, I can't hear you.

FERRUGIA: You wrote them letters and you said, I want to settle this, and you never have. Why not?

BOSTICK: I don't recall ever writing letters saying I want to settle.

FERRUGIA: Do you want to see them?

BOSTICK: Well, I don't recall that.

FERRUGIA: You don't recall the letters?

BOSTICK: No.

FERRUGIA: Finally, using the same apparent double talk that has frustrated the Sepulvedas, Bostick seemed to made clear he has no intention of settling the claim.

BOSTICK: It will be worked out with him.

FERRUGIA: Worked out? You've been saying that for how many years? How many years you been telling them that?

BOSTICK: I can't even remember when it happened.

FERRUGIA: It's not a real top priority, is it?

BOSTICK: Yes, it is a priority.

FERRUGIA: It's a priority to them.

BOSTICK: But I feel that it's money that I do not owe them.

SEPULVEDA: You know my son, who was in the Marines, and he went there to do what was right for his country, you know? And I know for a fact that -- for, you know, for somebody to actually steal from him is not right. This is me as a mother. I need to do this. This was my son's money and I'm -- and I'm not going to go away.

(END VIDEOTAPE)

MILES O'BRIEN: John Ferrugia joining us now from KMGH.

John, good piece. I'm curious, there's got to be a lot of other potential victims of this guy out there with so many debts outstanding.

FERRUGIA: Well, there are other debts. And including some child support debts that we've now found. But, you know, Fort Lupton is, I think, very embarrassed by this. There's talk around town that the mayor either ought to resign or settle this issue. This town has received -- or the council has received more than a thousand e-mails from all over the country for people saying, you know, this guy ought to not be mayor anymore.

MILES O'BRIEN: What kind of recourse -- could there be a petition, a recall? What does the town legislation hold?

FERRUGIA: Yes, there can be a recall or he could just resign. But at this point, there are debtors, this family, you know, among the debtors, that really have to get in line because he has a number of debts and the family, they could put a lean on the property or so on that he might have. But the issue really is, is that there are so many debts they have to get a lawyer. It's going to cost them more money to do that. They simply can't afford it.

MILES O'BRIEN: All right. And there's usually fairly tight restrictions at various levels governing people who handle funerals. Has he run afoul of those laws as well?

FERRUGIA: Well, he really hasn't. And in Colorado, funeral directors are unregulated. It's probably the only state in the union where that is the case.

MILES O'BRIEN: Really?

FERRUGIA: Yes.

MILES O'BRIEN: Wow.

FERRUGIA: But, no, he hasn't run afoul of any of those laws. The funeral was handled quite well. The issue really is, is financial. That he's been overpaid and he won't give the money back.

MILES O'BRIEN: All right, John Ferrugia of our affiliate KMGH, thank you.

FERRUGIA: Thanks, Miles.

MILES O'BRIEN: Soledad.

SOLEDAD O'BRIEN: Wow. What a crazy story.

MILES O'BRIEN: Yes.

SOLEDAD O'BRIEN: A look inside Iran's society now from the point of view of women. Women's rights there have been getting more progressive over the past decade. Some say, though, that new hard line president could be a huge road block. Aneesh Raman gets a very rare glimpse beneath Iran's veil.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT, (voice over): They marched by the thousands, clad in the strict black Islamic veil. Stern faces underscoring a stern belief that Iranian women are becoming too western. That more and more they are only loosely wearing the traditional hijab or head scarf required by law.

The debate has now come to the streets. These are members of a vocal minority who are pushing Iran's government for stricter laws on the hijab.

And that's what's happening. Police here will now fine women who's hijab is not being worn properly. Conservatives say there's been a slip in recent years with women showing too much hair, showing little respect for the laws that govern this Islamic republic. That this shop, for example, the sign says only women with the proper hijab can enter.

In your mind, where do things stand for women's in Iran? Are women's rights getting less or are they getting better?

SIMI BETAHANI (ph): No, it's not better. RAMAN: Simi Betahani is a leading poet in Iran. A leading feminist, as well. One who is concerned about where things are heading.

Years ago we had to wear it this way, she shows. But as you can see now, we wear it this way. And women struggled a lot until they reached this stage and I don't think they will go back now.

Since the hijab became law, Iranian women have made it part of their increasingly modern look, adapting the old rule to new times.

For this small progress, she says, women will fight and stand for their rights. They don't mind being beaten or disrespected. They will never retreat.

It is just one issue, but in its own way, the hijab and how Iranian women choose to wear it is a visible sign of where things stand and how far Iranian women are willing to push the limits.

Aneesh Raman, CNN, the Iranian capital Tehran.

(END VIDEOTAPE)

SOLEDAD O'BRIEN: Forty minutes past the hour. Time to check the weather once again with Chad Myers at the CNN Center.

Hey, Chad, good morning. What are you looking at?

(WEATHER REPORT)

SOLEDAD O'BRIEN: Andy Serwer's "Minding Your Business" just ahead.

What are you looking at?

ANDY SERWER, CNN CORRESPONDENT: Soledad, no question, the housing market is slowing down. But will we see a crash or are we looking at a soft landing?

SUSAN CANDIOTTI, CNN CORRESPONDENT: I'm Susan Candiotti in Florida where hydrogen fuel cell cars are being tested. Are they a viable alternative? And if so, when? That story coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

MILES O'BRIEN: Sorry about the bongos, folks. But to the gas pump we go nevertheless. That source of anguish and outrage for many Americans. Checking the latest gas gauge for you. Give a cheer, it's $2.92 for unleaded regular. That's down a full penny from yesterday. A small victory but a victory nonetheless. One month ago it was $2.58. A year ago, $2.22.

Those prices bother you? Most of us just have to lump it. There really aren't many alternatives in the car-based culture, are there? But on the distant horizon, is a way to fuel cars with hydrogen. Fuel cells which use a chemical reaction to generate electricity. Sounds like magic, doesn't it? Susan Candiotti reports.

SUZANNE BURLESON, PROGRESS ENERGY: I would say it's like a George Jetson car because it has a nice little hum to it. It handles well.

CANDIOTTI: It doesn't fly like the Jetsons', but with a spike in gas prices, this hydrogen fuel cell car being tested by Ford is receiving a lot of attention.

BURLESON: Well, I'll actually have people slow down and have me roll down my window to ask me about the car. They're wanting an alternative fuel source.

CANDIOTTI: Suzanne Burleson test drives the car while working for a Florida utility company. She advices consumers how to make their homes more energy efficient. But these days, talk quickly turns to gas prices.

FLORENCE LEIER, HOMEOWNER: It affects us quite a bit. That $200 a month, you know, on top of all our other expenses.

BURLESON: This is our hydrogen fuel cell vehicle.

UNIDENTIFIED MALE: Doesn't look any different. This, I think, is just fantastic. I don't know why it's taking so long.

CANDIOTTI: Ford says the hand made test cars cost a million dollars each. The fuel cells on the prototypes are fitted underneath the body.

UNIDENTIFIED MALE: This tank holds four kilograms of hydrogen.

CANDIOTTI: Progress Energy says that's the equivalent of four gallons of gas. But this car gets 50 miles per gallon. The only thing coming out of the exhaust pipe, watch closely, water and hot air.

The car is quiet, has good pickup and runs smoothly with a range of about 200 miles. A fill up takes just a couple of minutes. And here's a plus, the process is clean and odorless.

We parked the H2 in front of a MacDonald's. Within minutes, three people walked up. Two of them hybrid car owners already.

UNIDENTIFIED MALE: We have an interest in, you know, saving. Saving what little air we have left for our grand kids and great grand kids.

CANDIOTTI: Impressed? Yes. But how long can the public wait for the H2 to be mass produced? UNIDENTIFIED MALE: There's now, as we go over the threshold of $3 a gallon, I'm anticipating the pressure is definitely going to be mounting and probably exponentially.

CANDIOTTI: Maybe. But Ford said it's likely to take at least another 10 years for the H2 to hit the streets.

Susan Candiotti, CNN, Orlando.

(END VIDEOTAPE)

MILES O'BRIEN: They've been trying to come up with a name for that car. The Ford Hindenburg is out, think I, right?

SERWER: Yes.

MILES O'BRIEN: That's definitely not going to happen, right?

SERWER: No. No.

SOLEDAD O'BRIEN: Why is everything five years away? I mean that sounds like a great idea.

MILES O'BRIEN: Why is everything five years?

SOLEDAD O'BRIEN: I'm absolutely not joking.

SERWER: Right. But not for Toyota, you could say.

SOLEDAD O'BRIEN: I mean, but every single thing that's being worked on is essentially, you know, five years out. And every story with, and they're looking forward to five years from now. And I think the American public is sort of ready for someone to say, here's a solution and here's a solution now.

MILES O'BRIEN: We want it now. We're Americans, darn it, we want it now.

SERWER: Let's do that. We're talking about the housing market here and questions about whether or not the boom in housing prices is over. And, it sort of is.

MILES O'BRIEN: Five years away.

SERWER: No, it's coming. It's here. But what's happening, you know, a lot of people thought that this market would just crash and no one really thought that, well, what if it just sort of . . .

SOLEDAD O'BRIEN: Fizzled.

SERWER: Yes, fizzled. And I think we're seeing some fizzling here.

MILES O'BRIEN: Oh, stop it.

SERWER: Here's some new evidence.

SOLEDAD O'BRIEN: You're talking to a man who bought at the height of the market.

SERWER: I know. I know.

SOLEDAD O'BRIEN: It's going to be OK.

SERWER: Yesterday a company called ACC Capital, which is one of the largest mortgage lenders, announced big layoffs. They're closing 229 branches and laying off 3,800 employees out of 11,000. One third of its work force. This is the nation's largest sub prime lender. That's a sign, folks, that this business is slowing down.

Meanwhile, Hovnanian, which is the eighth largest home builder in the United States, particularly high net worth homes, fancy homes that is, lowered its financial guidance, saying that the outlook does not look so rosy. The stock plunged 6 percent to $36. Now this even though housing sales surged over 13 percent in March, which sounds good but the wrinkle is that housing prices fell 2 percent and it was the first year-over-year decline since 2003. And what that says is that homeowners are slashing prices to move them. And, that, Miles, is a sign . . .

SOLEDAD O'BRIEN: Still selling, just slashing.

SERWER: That things are starting to wind down.

SOLEDAD O'BRIEN: That's so ugly for you.

SERWER: For you, Miles. On a personal note. On a personal level.

MILES O'BRIEN: It's all about me. Thank you. Thank you.

SOLEDAD O'BRIEN: Oh, it's so sad.

MILES O'BRIEN: The boy in the bubble. SERWER: Yes.

MILES O'BRIEN: All right, thank you very much.

SERWER: You're welcome.

SOLEDAD O'BRIEN: I'm sure you'll be fine.

MILES O'BRIEN: Yes, sure.

SERWER: Just don't move.

MILES O'BRIEN: I'm not moving.

SERWER: You're always fine if you don't move.

MILES O'BRIEN: I'm not going anywhere.

SOLEDAD O'BRIEN: That's true.

MILES O'BRIEN: I'm moving in five years.

SOLEDAD O'BRIEN: That's very true.

SERWER: Five years. Get one of those hydrogen car and move right out.

MILES O'BRIEN: All right.

SOLEDAD O'BRIEN: Want to talk about a serious subject ahead this morning, alcoholism. There's word that an old drug is going to be one of the best ways to try to treat it. We'll take a look at that story coming up next.

And then the White House response plan for a flu pandemic. At least one disaster expert says it's not so good. Falls short. We're going to talk about that ahead on AMERICAN MORNING. We're back in a moment.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: An estimated 8 million people are alcoholics and most of those people aren't getting the help they need. A new study, though, shows that there are some effective ways to keep alcoholism in check. CNN Medical Correspondent Elizabeth Cohen is at the CNN Center in Atlanta.

Hey, Elizabeth, good morning.

ELIZABETH COHEN, CNN CORRESPONDENT: Good morning, Soledad.

Soledad, to treat the problem of alcoholism, there's long been this debate. Do you use drugs to try to fight the alcoholism or do you use counseling or do you try to use a combination? So researchers set out with 1,400 recovering alcoholics trying to keep them sober. And what they found out is very interesting. They found out some of the most effective treatments and some of the least.

Some of the most successful treatments that they found in their study was a drug called Naltrexone plus short term counseling. The kind of counseling you would just get from any family doctor. Or intense counseling with a specialist plus that short term counseling. And both of those were about the same. Each of them was approximately as effective as the other one.

Now, it's interesting some of the least effective approaches they found, in fact in this study the least effective approach was another drug called Acamprosate. That was sort of surprising because that drug had shown much more success in Europe.

But the bottom line of this study is that people who are suffering from alcoholism do have some options. If they have access to and can afford counseling from a specialist, from an addiction specialist, it does works according to this study. However, if they don't have that kind of access or want to try another approach, this drug also seems to work as long as you're also getting counseling from your family doctor.

Soledad.

SOLEDAD O'BRIEN: Elizabeth, did the study look at, you know, the 12-step approaches that we're all very familiar with as a way of fighting alcoholism?

COHEN: Right. Some people choose not to go to a specialist and chose not to take drugs. Instead, they chose to do something like AA. They didn't include AA in this study and it would be interesting to see how AA compares to those approaches.

SOLEDAD O'BRIEN: Can I ask you a quick question about the White House proposal? We're going to be hearing it a little bit later this afternoon, actually. It comes amid concerns clearly about bird flu, but it's really a plan for any pandemic, right?

COHEN: Right. Different kinds of viruses can cause a pandemic. A pandemic is basically a large epidemic of any kind of virus where it spreads easily from person to person and where there's not a lot of immunity in the community. So it can spread kind of like wild fire. And different kinds of flu viruses could cause a pandemic. A bird flu possibly, if it mutated from its current form, could be one of those virus that could cause a pandemic.

(COMMERCIAL BREAK) SOLEDAD O'BRIEN: Are you prepared for a flu pandemic? The White House is ready to unveil its plan. CNN's got some details. We're live at the White House this morning.

MILES O'BRIEN: Also another kind of epidemic of kids sucking down those sugary sodas. The beverage industry is pulling the drinks out of cafeterias and a fast-food loving former president gets some credit. We'll explain.

JOE JOHNS, CNN CORRESPONDENT: I'm Joe Johns in Buckhannon, West Virginia, where relatives of the 12 men lost in the Sago mining disaster are demanding answers this morning.

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